This is a business world full of imagination and surprise. About 10 years ago, no one would have thought of the rise of the iPhone, let alone the emergence of the sharing economy represented by Uber.
But in the past 10 years, from countries, regions to enterprises, through innovative technologies, business models and cross-border cooperation, the world has created various surprises. At present, innovation has become the consensus of everyone. It is no longer just an original idea in the technical field, but has even become the most important and only sustainable source of economic development for enterprises and countries.
Looking at innovation again in 2016, after experiencing the early innovation slump, global innovation has become the new focus of attention.
In the past year, the World Intellectual Property Organization, together with a number of relevant institutions including Kearney Consulting, conducted in-depth research on 128 economies that account for 92% of the world's population and 98% of the world's GDP, and launched the "2016 Global Innovation Index" report. The following is our study of the Global Innovation Index report, which highlights the 10 most noteworthy global innovation trends. We hope to help you and your company use the "global innovation" strategy to win in the future.
1. Bridging the innovation gap
—— Innovation is becoming increasingly global, but gaps remain.
GII rankings show that innovation leaders have experienced high levels of global diversity over the years. Switzerland remains at the top of the list for the sixth consecutive year.
However, in contrast to achieving an increasingly balanced innovation environment, there is a multi-polar distribution of research and innovation. Most activity remains concentrated in high-income economies and some middle-income economies such as Brazil, China, India and South Africa. Only China has narrowed the gap with rich countries such as the United States in terms of R&D spending or other measures of innovation input and output. Other middle-income economies remain far behind, particularly in the pillars of institutions, human capital and research, infrastructure, and creative output.
Even for middle-income countries, most of them still obtain solutions primarily to domestic problems through technology transfer from advanced economies. Developing countries need to clearly articulate their own innovation needs and work strategically to meet them, rather than just adding to the innovation networks of global companies.
2. “Technological Nationalism”
—Innovation is still sometimes not portrayed as a global win-win.
When a national entity produces more science or engineering graduates or more patents, these achievements are viewed by other countries as a competitive threat rather than an opportunity. Technology or technology-intensive services imported from abroad are often viewed by countries as a cost rather than a benefit. States are seen as “competitors rather than collaborators”.
In general, policymakers often worry that global innovation will cause the domestic innovation system at the national level to be "hollowed out." Their priority focus is keeping talent and investment in the country. What's even worse is that "technological nationalist policies" are prevalent in many countries.
Global innovation should be understood as a global win-win development - everyone has the potential to benefit from global innovation.
3. Avoid the “lost 10 years”
—— Avoid falling into a persistent low-growth pattern through global innovation.
The global economy is not yet back on track. There are real concerns about sluggish future output growth and low productivity levels. In this case, finding new sources of productivity and future growth points has become a priority for all parties.
The problem facing the innovation community is how to more systematically expand R&D to other low- and middle-income economies and avoid overreliance on a limited number of countries to drive global R&D growth. There is an urgent hope that policymakers will increase public investment in innovation to expand short-term demand and promote long-term growth potential.
Successful innovation strategies cannot be implemented through a "stop-and-go" approach: if R&D spending or incentives for innovators are not sustained, the progress accumulated over the past few years will be quickly lost.
4. Don’t be obsessed with numbers
—Absolute spending on R&D or the sheer number of domestic researchers, science and engineering graduates, or scientific publications do not guarantee the success of an innovation system.
Initiatives such as increasing the proportion of science and engineering graduates are often seen as a panacea for establishing a sound innovation system. To avoid an entirely quantitative approach, one approach is to study the quality of innovations and assess the value of universities, scientific output and patents, and this is the approach adopted by the GII.
High levels of quality remain a distinguishing feature of leaders such as Germany, Japan, the UK and the US. China is the only middle-income country whose innovation quality is as good as that of the leaders.
But there is more to consider. High-quality innovation inputs and outputs often reflect the presence of other factors that contribute to a healthy, dynamic and productive innovation ecosystem. Ideally, these systems would be self-sustaining, with a bottom-up trajectory and no need for iterative policy or government to drive innovation.
If governments go too far, if they cherry-pick technology, they could quickly reduce the likelihood of a self-sustaining and organic innovation ecosystem. Providing enough space for entrepreneurship and innovation; providing the right incentives and encouragement for grassroots forces such as individuals, students, small companies, etc.; and a degree of "free access" that often questions the status quo are some of the elements that need to be in place.
For governments, striking the balance between intervention and laissez-faire is more challenging than ever.
5. Global innovation thinking
——The degree of globalized R&D is still mainly in its infancy, with most R&D activities still concentrated in the home country.
Part of the reason for this is that the costs and benefits of geographic dispersion are still being explored. Managing global R&D is not limited to coordinating foreign R&D teams—it involves managing the transfer of innovation regardless of corporate loyalties and ownership, and allocating benefits regardless of where headquarters are located.
Building diverse local and international partnerships is challenging for most companies. Most companies do not have adequate processes in place for identifying, selecting, establishing and operating, and exiting partnerships globally.
6. A more inclusive view of innovation
——Non-R&D innovation spending is an important component of benefiting from technological innovation.
In the past, economists and policymakers have focused on R&D-based technological product innovation, primarily generated internally and concentrated in manufacturing industries. The concept of the innovation process is characterized by being a closed, internal and localized process. Technological breakthroughs must be “fundamental” and arise from the “global frontier of knowledge.” This characterization implies that there are leading and lagging countries, with low- or lower-middle-income economies having to catch up.
Today, innovation capability is considered more as the ability to utilize a combination of new technologies; it embraces the concepts of incremental innovation and "innovation without research." Non-R&D innovation spending is an important component of benefiting from technological innovation. At the same time, people realize that incremental innovation can have an impact on development.
7. “Fail often, fail fast”
——As a participant in national innovation, the company needs to establish a new corporate innovation culture.
Most companies in high-income countries - especially small and medium-sized enterprises, and almost all companies in emerging economies - conduct all product development and innovation activities at the corporate center.
In order to benefit from global innovation, a new corporate innovation culture needs to be established. This involves simplifying hierarchical relationships and increasing cross-functional collaboration in R&D activities, supply chain management and marketing; a diverse talent pool that brings new perspectives and skills; an environment that encourages risk-taking; and experimentation with new partnership models and innovation platforms.
The failure rate of innovation will definitely exist. The reason why the innovation failure rate of leading companies is not higher is because they have designed a scientific process based on multiple aspects of innovation, and every decision is not made based on feelings, but based on data. Product innovation is mainly decided based on the boss’s personal feelings, and the innovation failure rate reaches 90%.
So, adopt a "fail often, fail fast" approach to encourage employees to take risks and not demonize failure.
8. Failure of following strategy
——The days of following the natural course of the market and employing a bandwagon strategy are over. Now you have to find ways to differentiate yourself in order to survive.
Over the past 30 years, Chinese entrepreneurs have basically had two business logics: First, for those with leading ideas,For knowledgeable entrepreneurs, this is to bring over technologies from all over the world and then use low-cost labor to achieve high growth and high profits. Secondly, more companies have adopted a follow-up strategy. They know that the Chinese market has huge capacity and they can make money by following the market.
But in recent years, the above business logic has become increasingly difficult to implement. There is only one solution - innovation.
9. CEO=Chief Innovation Officer
——Building innovation portfolio capabilities is the guarantee for reducing innovation risks.
In the past, companies just launched innovative products and then tried to get the market to accept them. Innovation was not the most important thing for the CEO. Innovation was only the responsibility of the R&D manager. Now the situation has completely changed. The market has fluctuated violently, competition has become complicated, and cross-border disruptions can strike at any time. Most successful companies have the CEO personally driving innovation, and establishing an innovation system, encouraging innovation, and supporting innovation as one of their primary responsibilities.
After the sales scale of a consumer goods company exceeds a certain scale, if the company wants to grow further, innovation must become the core driving factor. Then, according to the level of innovation risk, it is necessary to match the innovation portfolio of high, medium, and low risks, and N products must be planned in each category to maximize the balance of innovation risks and prevent the failure of one or several products from bringing down the entire company.
10. Ecosystem Innovation
——EcosystemSystem is becoming an advanced form of enterprise innovation, and it must be international rather than closed.
Technology is driving integration on a global scale - the integration of things and things, the integration of people and people, the integration of people and things, the integration of organizations and organizations - the speed of this integration is very rapid, and the result is the creation of more and more ecosystems.
The development of science and technology has enabled every enterprise to gradually build an ecosystem or participate in an ecosystem. Through the ecosystem, user needs can be more accurately identified, and needs can be quickly met through innovation. The speed and accuracy of demand identification, resource combination, and value realization in the ecosystem are much higher than those of the previous traditional value chain system, so it is better able to adapt to today's drastically changing market environment.
Representative cities are models for companies to build innovative ecosystems. An interesting fact is that as many companies grow larger, their per capita innovation decreases, while as a city grows larger, its per capita innovation continues to increase, such as Boston and San Francisco. The reason is that the city is an ecosystem, and people and businesses in the city are self-organizing roles. Each role will generate more innovation sparks through collision with other roles.
